Project Risk and Procurement Management Report - Business Strategy

This report delves into the intricacies of project risk and procurement management, emphasizing the significance of strategic procurement and robust supplier relationship management. It examines the complexities of supply chain structures and the critical importance of selecting the right suppliers, particularly within the context of a UK-based business, Agora Greek Delicacies, that sources food materials extensively from Greece. The report analyzes various risks, including economic, operational, and reputational risks, and discusses strategies for their mitigation. It explores the procurement function's role in managing global vendor networks, adapting to rapid shifts in the business environment, and ensuring compliance with regulations. The study highlights the importance of project risk management in minimizing potential negative impacts on project schedules and objectives, especially considering the trade risks between the UK and Greece. The report provides a detailed overview of the company's operations, its supply chain, and the potential impact of economic and political factors on its business relationships. It emphasizes the need for effective risk management strategies to ensure business continuity and success in a dynamic market.

PROJECT RISK AND
PROCUREMENT MANAGEMENT

Abstract
Project risk management and procurement management involves planning acting and monitoring
of the expected risk and creation of a steady supply chain which can be converted to a value
chain by the organisation. Planning in advance for project risk leads to obtain great inputs related
to constraints in the project including time, cost, scope, resources and quality. Global
organisation includes team working with defined roles and responsibilities that help in risk
monitoring and controlling ensure that the plans are implemented effectively. The current study
aims to discuss the strategic procurement and building up of a supplier relationship management
favourable terms and conditions and to understand involves risk in a project. The complexities
involving the supply chain structures and choice of suppliers is very vital to the organisational
working. The buyer-supplier relationship coherently infected by the supply chain risk raw
material availability issues involved in environmental sustainable economic metals that it
increases the pressure on the organisation working. The study focuses on operational working of
Agora Greek Delicacies which is a UK based business sourcing extensively its food material
from Greece for wholesale supplies across the UK. Focusing on business operations and risk
management strategies of the company the study will discuss the management of the risk and the
dangers of economic and other risk that may affect the supplier and buyer relationship. The
discussion also focuses on the procurement functions and management of networks involving
vendors and suppliers and the impact of business environment which can rapidly shift the
business operations and flow of business.
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Table of Contents
Introduction......................................................................................................................................4
The company description.................................................................................................................4
Discussion........................................................................................................................................5
Project risk and procurement management......................................................................................9
Project risk management strategies for Complex projects............................................................11
Examples from Agora Greek Delicacies.......................................................................................11
Conclusion.....................................................................................................................................14
Reference.......................................................................................................................................17
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Introduction
Globalisation and liberalisation have been a driving force in the economy that has turned the
world has a global village. The ease in doing business along with movement of goods has
ushered an economy which is spreading across the boundaries. The consumer has increased their
level of expectations and the competition in the market turned fierce. In order to meet the
consumer expectations and survive in the competition the enterprises are increasingly working
on building their supply chain into value chain. To foster this they are adopting policies like
strategic procurement, relationship with suppliers on long term basis, global outsourcing and risk
management. The current study looks into the aspects of project risk management and
procurement management. The primary objective of the study is to analyse Enterprises based in
UK sourcing their food extensively from Greece. The Agora Greek Delicacies is a UK based
company with its warehouse in Springburn, Glasgow. The study will discuss the risks related to
supply chain management and procurement functions and also economic dangers that pose a
potential risk considering UK and Greek relationships (Agoragreekdelicacies.co.uk, 2019).
The company description
The Agora is a Greek online Supermarket operating in UK providing a wide variety of foods and
drinks products. It was started in 2012 by Michael and Christina after undertaking extensive
research into the Greek food and drink market. The company resources the best produce directly
from local producers across Greece and are also popular supplier of big Greek brands. The
company aims to become the first choice in and also promotes healthy living through fostering
Mediterranean diet. The company supplies essentially to wholesale customers and provide
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wholesale range of Greek food items to restaurants Bistros and delis. The company provides free
delivery across the UK (Agoragreekdelicacies.co.uk, 2019).
Discussion
The business organisation employs techniques of management for efficient functioning of their
business.
The procurement management essentially involves process of sourcing which entails
evaluation and negotiation for opting the best goods and services to meet the business standards.
The business organisation ability of evaluating and identifying potential sources along with
prioritizing provide opportunities to be implemented in favour of business is essentially required.
The procurement management is vital task in supply chain management dependent on the
purchases made from external suppliers (De Araújo et al. 2017). The business can achieve
economies of scales and also improve their margins of profits with the help of adequate supply
policies. The company can edge out its competitors and succeed with the help of stable purchase
management.
The importance of procurement management can be seen in benefits it provides to Organisation
in saving valuable time and helping organisation. It also helps in large scale Savings and also
provides assurance of quality regarding the purchase which can be achieved in effective delivery
time. The procurement management guarantees the management of warranties which is a short
with each purchase and the savings which the company gain on the basis of operational
efficiency (De Marco, 2018). The procurement management also initiates transparency in the
business functioning and also helps in enhancing the business relationship with the suppliers. It
is essential that the Global organisation working on a large scale to maintain a good relationship
with suppliers in order to compute in the complex market involvement. The agreement between
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the supplier and the organisation is essentially required for sustainable business practices and
acquiring of goods with ease. The procurement management is required for-
● Ensuring of compliances
The Global organisations are surrounded with multiple rules and regulations that govern the
sector specifically in the food sector. It is essential that organisations to adhere and comply by
the regulations while making purchase (Glas and Kleemann, 2016).
● Support to strategic vision
The procurement management helps in guiding the organisation in long term strategic planning
process also assistant achievement of the strategic goals. It also helps organisation in realising
the technical needs and requirements in order to increase the return of Investments.
● Enhancing the relationship management with the supplier
It is essential that the procurement management develops long term relationships with suppliers
for ensuring continuous supply and best product which is secured at best prices. Procurement
management also integrate supplier as partners who helps in creation of a value chain process
(Kakwezi and Nyeko, 2019).
● Cost saving measures
The procurement management helps in improving the cost saving through analysing the product
available across the multiple suppliers identify the best options for the balance of the cost and
quality as per the business requirements. Procurement management essentially required for
Business firms like Agora for maintaining competitive prices in food sector.
● Increasing the efficiency of organisation
The procurement management helps in maintenance of quality goods and also ensure delivery on
time. The practices of procurement in organisation provides support adjust according to the
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market volatility involving changes in the price shortage of labour economic and financial
problems (Volker et al. 2018). The optimal forecasting with the help of project risk management
can help the organisation for preparing itself to deal with market volatility in a better way.
Project Risk management involves process that is essentially focused on minimising the
potential risk and negative impact on the project schedule and time table. The mitigation of risk
raised by unexpected events affecting the technology process resources and people involved in
the project effectively managing them is the purpose of project risk management (Crispim et al.
2019). Identification of potential problems before they occur and activities to handle risk needs
to be planned and invoked for reversing the adverse impacts of achieving the objectives of the
business. It essentially involves the process linking the process of management planning
recognition analysis of planning of all the risk monitoring and control purposes to complete the
project without any hindrances.
The trade risk involved between Greece and UK
Greece is an important market for British goods and services and UK exported goods worth 2.16
billion pounds from Greece in the year 2016. The maximum good imported from Greece to the
UK includes agricultural produce like fruits, vegetables and dairy products. The Import of
products from trees includes Organic products nuts daily items cheese and other heterogeneous
blends which constitutes of 1% of the total import from Greece (Bbc.com, 2019). The scale of
exposure to the food industry in the UK is rather low in the economy. The direct and immediate
impact that UK food business will however have not much significant impact to the UK food
chain as a whole sense the total value of the export is constricted to 1%. The real concern UK
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food businesses lies in the impact Greece has on the rest of the Eurozone and the exchange rate
of Euro and Sterling (Thakur, 2017).
Short term risks
The primary risks are the liquidity of organisations and money to be utilised to complete
exchanges.
Liquidity
The liquidity as capital controls which is forced by the Greek government is enormously limiting
the flow of capital in the economy and concerns over pulling back a significant percentage of
money. The introduction of temporary capital controls 29 June 2015 effects exporters and as for
the bank policy regarding only 60 Euros account can be withdrawn per day is hampering the
liquidity. Farmers in Greece seek to get the payment in cash and manufacturers are able to fulfil
the cash demand the shortage of money. This leads to delay in the supply which is impacting
upon export relationship with buyers (Thakur, 2017).
Currency Risks
There spinner transitory references for Euro in European export market. The exit of Greece from
Eurozone can altogether lead to debasing of state of Greece funds in euro. In the long run, the
UK importers need to oversee greater risk of currency in execution of drachma as opposing to
Euro. The primary producers unable to cope with the changing demands affected by the
globalised market but agility exporters prominent (bbc.com, 2019). The uneven distribution of
balance of power and practices related to inform enforcement observed in supplier relationship.
Presence of the situation in the longer term and lead to supply dissatisfaction and will have a
negative impact on the commitment of the suppliers in the long run. Ethical audit is required in
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order to practice sustainable procurement and accept risk control policies in order to smooth out
the supply chain network.
Project risk and procurement management
It is the need of the hour in the current situation for government department to design systems
essentially to look into the procurement and supply chain networking and respond to changes
rising in a typical dynamic market and implementing the necessary measures. As mentioned by
Harris (2017), implementation of measures is imperative for mitigation actions for Risk and
generation of savings.
Procurement professionals indispensable team in a risk management of a country specifically
when a third party is involved in the contract. The major is that organisation specifically food
and beverages sector face today are-
● Strategic risk which includes high level of compliance to the strategy of the company.
The political impact and uncertainty in the supply of the product are few of the strategic
risk (Carvalho and Rabechini Junior, 2015).
● Operational risk which impacts on the day-to-day operations of the company supplies
labour problems for increase in the price and so on.
● Financial risk involves volatility in the foreign exchange value raw materials and so on.
● Reputational risk involves loss in the leadership or negative impact of the company in the
public which jeopardize the image of the company such as environmental requirement
compliance, legal compliances (Muriana and Vizzini, 2017). It also involves contract
agreement orders transportation of goods clearances and warehousing compliance which
needs to be made by the company
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The stages of risk management
It is important to understand that better operations in organisation needs team working for
identification of risk. Risk factor can be broken down into physical, people, process and
management risk (Liu et al. 2015). The detailed analysis of project characteristics, organisational
culture and organisational process asserts the risk can be identified analysis of root cause of the
risk that influences the objective of the project evaluation of the triggers that cause risk and
potential damages that may harm the organisation.
● Identification of the risk
It is a process where risk related to the project are identified let me have a short term and long
term impact on the project working documenting the characteristics of the operations.
● Qualitative and quantitative Risk analysis
Qualitative analysis involves process where risk arthritis for further analysis or actions to be
taken by combining the probability of the occurrence or impact the risk will have on the
organisation (Arashpour et al. 2015).
The quantitative risk analysis involves statistical analysis which affects overall objective of the
project. The quantitative risk analysis is applied to priority risk through risk analysis having
potential impact upon the competitive demands in the project (Muriana and Vizzini, 2017).
● Planning responses to risk
This involves process in which options and actions are developed in order to derive opportunities
and eliminate threats and risk to the project objectives (Karlsen et al. 2015).
● Monitoring and controlling the risk
This involves the process through which the execution of the risk response express and
continuous monitoring and tracking of the residual risk are analysed and assessed. This helps in
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identification of new risk and also the effectiveness of the risk responses in mitigating the risk of
the project (Willumsen et al. 2019).
Project risk management strategies for Complex projects
The International organisations considered as risk management as a strategic management that
help in operations and Tractors to understand and recognise the level of risk involved in the
impeded activities process and application of the work (Hillson, 2017). Risk management
strategy is aligned with the organisation strategy involving Risk architecture which specifies the
roles and responsibilities along with risk reporting structure, risk strategy defining the attitude
and philosophy of risk management policy and protocols that presents the form of risk guidelines
for the organisation detailing the rules and procedures which specify the methodologies of risk
management (Bi et al. 2017).
Examples from Agora Greek Delicacies
Agora sources its food products directly from selective Greek producers and aim to provide the
best of the Greek food and drinks in the market to meet culinary needs. The company aims to
strive to provide real taste of Greek food and unique experiences. The company is expanding its
suppliers place in Greece to bring about more authentic products which are true to the Greek
cuisine. The range of products are growing nearby year and the companies continuously
attempting to provide best consumer services and wide range of quality products and Catering
and events catalogue services. The company exclusively deals in wholesale suppliers and meet
all health and safety regulations (Agoragreekdelicacies.co.uk, 2019).
The procurement of the products by the company emphasize upon novation and authenticity to
the taste of the products. It involves a new generation of services like delivering the products to
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the door steps and is continuously reinventing themselves to provide better solutions. The
company provides the produce at the store step directly from the warehouse. The company
predefined contractual application that focuses on providing innovative products every year and
cervical link between the strategic suppliers. The company focuses on the development of new
technologies and products and elaborate in information of joint marketing efforts through
incorporating technology and social media platforms along with participating in the evaluation of
new proposals provided by the suppliers regarding innovations. The company is strictly engage
negotiating specifications with the suppliers and implementing strategies that leads to upgrading
the quality of services and products provided by the suppliers (Agoragreekdelicacies.co.uk,
2019).
The procurement functions
It has been a continuous endeavour on the part of Agora engages with selected suppliers to buy
and source materials which include functions of procurement. The procurement management
undertakes a number of factors into consideration which includes inventory cost, transportation
cost availability of supply, quality of deliveries from the suppliers and effectiveness in delivering
the supply on time. The procurement team is continuously engaged in negotiating with new
suppliers and building up reliable suppliers for container skating of wholesale supplies to the UK
market. The suitable suppliers and development of the capacity to produce is one of the
management primary tasks. The approach to supply management is concerned about the
availability of the products for shopping which are critically high priced and have a reliable flow
of supplies in the future which is very vital to the success of the company
(Agoragreekdelicacies.co.uk, 2019).
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